Comparing L-3 Communications Holdings (LLL) and American Science & Engineering (ASEI)

L-3 Communications Holdings (NYSE: LLL) and American Science & Engineering (NASDAQ:ASEI) are both aerospace companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, dividends, risk, institutional ownership and valuation.

Analyst Recommendations

This is a breakdown of recent recommendations for L-3 Communications Holdings and American Science & Engineering, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
L-3 Communications Holdings 0 7 4 1 2.50
American Science & Engineering 0 0 0 0 N/A

L-3 Communications Holdings presently has a consensus price target of $193.89, indicating a potential upside of 4.55%. Given L-3 Communications Holdings’ higher probable upside, research analysts clearly believe L-3 Communications Holdings is more favorable than American Science & Engineering.

Volatility and Risk

L-3 Communications Holdings has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500. Comparatively, American Science & Engineering has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500.

Institutional & Insider Ownership

79.1% of L-3 Communications Holdings shares are owned by institutional investors. Comparatively, 72.9% of American Science & Engineering shares are owned by institutional investors. 2.9% of L-3 Communications Holdings shares are owned by insiders. Comparatively, 2.4% of American Science & Engineering shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares L-3 Communications Holdings and American Science & Engineering’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
L-3 Communications Holdings $10.90 billion 1.33 $1.32 billion $8.87 20.91
American Science & Engineering N/A N/A N/A ($0.37) -100.13

L-3 Communications Holdings has higher revenue and earnings than American Science & Engineering. American Science & Engineering is trading at a lower price-to-earnings ratio than L-3 Communications Holdings, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares L-3 Communications Holdings and American Science & Engineering’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
L-3 Communications Holdings 6.44% 14.15% 5.60%
American Science & Engineering 0.19% 0.15% 0.13%

Dividends

L-3 Communications Holdings pays an annual dividend of $3.00 per share and has a dividend yield of 1.6%. American Science & Engineering pays an annual dividend of $2.00 per share and has a dividend yield of 5.4%. L-3 Communications Holdings pays out 33.8% of its earnings in the form of a dividend. American Science & Engineering pays out -540.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. L-3 Communications Holdings has raised its dividend for 13 consecutive years. American Science & Engineering is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

L-3 Communications Holdings beats American Science & Engineering on 11 of the 14 factors compared between the two stocks.

About L-3 Communications Holdings

L3 Technologies, Inc., formerly L-3 Communications Holdings, Inc., is a prime contractor in Intelligence, Surveillance and Reconnaissance (ISR) systems, aircraft sustainment, simulation and training, night vision and image intensification equipment and security and detection systems. The Company provides a broad range of communication and electronic systems and products used on military and commercial platforms. It operates through four segments: Electronic Systems, Aerospace Systems, Communication Systems and Sensor Systems. Electronic Systems provides a broad range of products and services for military and commercial customers in several niche markets across several business areas. Aerospace Systems delivers integrated solutions and provides engineering, modernization, upgrade, sustainment, and maintenance and logistics support. Communication Systems delivers products and services for the global communications market. Sensor Systems provides diverse sensor technologies.

About American Science & Engineering

American Science and Engineering, Inc. (AS&E) is engaged in developing, manufacturing, marketing and selling X-ray inspection and other detection products. The Company manufactures X-ray inspection products that can be used to inspect parcels, baggage, vehicles, pallets, cargo containers and people. The Company offers its products for homeland security, force protection, public safety and other critical defense and security applications. The Company’s products and services are grouped into approximately five areas: cargo inspection systems, which include OmniView Gantry System, Z Portal System, Sentry Portal System, CarView System and ASE Connect; mobile cargo inspection systems, which include Z Backscatter Van; parcel and personnel screening inspection systems, which include Gemini System, SmartCheck System and MINI Z System; custom products, and service and support.

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